With the Affordable Care Act (ACA), also known as ObamaCare, there are more options for student health insurance than ever before. Not only can young adults be carried on their parent’s policy until they reach the age of 26, there are special low-premium “catastrophic” plans available for those under 30. These plans have low premiums, but a very high deductible for health services and are intended to protect participants financially if they suffer a major health event. These policies do cover three primary-care visits per year without cost sharing and cover free preventive care benefits. In addition, if a student is not claimed on their parents’ tax return, they are eligible for the same premium tax credits as other health insurance seekers in the marketplace.
It’s important for students to know that they must have appropriate health insurance by 2014 or face a penalty for non-coverage. The mandate that all adults have insurance coverage applies to health insurance for students, as well.
Getting Health Insurance Coverage on a Parent’s Policy
If a student’s parent’s health insurance covers dependents, it will cover them until their 26th birthday. If the student has already been dropped off the parent’s policy, they can be re-added during the next open-enrollment period.
Once a student reaches their 26th birthday, the coverage will end. The student will then have a special enrollment period to find alternate health insurance, either through their workplace or through the marketplace.
Finding Student Health Insurance at School
Many universities offer health coverage through student health clinics, and also offer health insurance plans for students. CPlans that only offer discounts on services do not qualify as health insurance, and will still cause an individual to incur the tax penalty. Fortunately, self-funded health coverage offered by colleges and universities to their students will be required to have sufficient essential coverage beginning in 2015.
Finding Coverage in the Marketplace
Students who are not covered on a parent’s policy or through sufficient school insurance can find their own coverage through the marketplace. As long as they are not claimed as a dependent on their parent’s tax return, they can receive the same premium and cost-sharing tax credits as other Americans.
Individuals and families with income between 100% – 400% of poverty will be eligible for tax credits to reduce insurance premiums. In addition, those earning 100% – 250% of the federal poverty level will be eligible for assistance with insurance cost-sharing, like deductibles and copayments. In 2013, a single person with income between $11,490 and $45,960 would qualify for some sort of assistance.
In addition, for adults under 30 years old, there is a special catastrophic plan available. This plan has low premiums, but a very high deductible for health services. They are intended to protect participants financially if they suffer a major health event. These policies do cover three primary-care visits per year without cost-sharing and cover free preventive benefits.
Low Income Students
As a result of the ACA, many states have chosen to expand their Medicaid eligibility requirements. In those states, adults making up to 133% of the federal poverty line would be eligible for assistance. Medicaid and Children’s Health Income Program (CHIP) eligibility is reviewed automatically when an application for health insurance is made through the marketplace.
In states where Medicaid eligibility is not expanding, lower-income students may be able to gain a waiver to avoid paying a tax penalty if they cannot afford insurance. In addition, ObamaCare expands funding for community health centers that provide free or sliding-scale health services to lower-income Americans.
Due to the ACA, there are additional opportunities to receive student health insurance to protect students financially when they have medical needs. Carefully reviewing all of the options for health insurance for college students and choosing the best plan for them will make a big difference in a student’s financial security as they move through this important time in life.